On 29 October 2026 Judge Richard G. Stearns of the U.S. District Court for the District of Massachusetts ruled on cross-motions for summary judgment in Commonwealth of Massachusetts et al. v. Oz et al. (No. 1:26-cv-12962-RGS, Dkt. 147). The plaintiffs are 23 states, the District of Columbia and the governors of Kentucky and Pennsylvania. They challenged parts of CMS’s June 2026 interim final rule implementing the Medicaid “community engagement” (work) requirement in H.R. 1, the 2025 budget law its sponsor called the “One Big Beautiful Bill” (91 Fed. Reg. 33348, 3 June 2026).

Who the requirement covers

From 1 January 2027, Medicaid coverage for “applicable individuals”, broadly the Affordable Care Act expansion population, depends on doing 80 hours a month of work or community service, or at least half-time study. The law exempts anyone “medically frail or otherwise has special medical needs (as defined by the Secretary), including” people who:

  • are blind or disabled;
  • have a substance use disorder;
  • have a disabling mental disorder;
  • have a physical, intellectual or developmental disability that significantly impairs one or more activities of daily living; or
  • have a serious or complex medical condition.

What CMS added, and what the court did

The rule defined a medically frail person as someone in one of those five groups whose condition also “significantly impairs the individual’s ability to comply with the community engagement requirement” (42 C.F.R. § 435.554(c)(5)(i)). The court held that this extra test is “beyond the powers of CMS (ultra vires) and thus contrary to law”. Its reasoning:

  • “Including” introduces examples, so everyone in the five groups Congress listed counts as medically frail.
  • Congress added a function test only to the disability group (“activities of daily living”), which shows “Congress clearly knew how to qualify classifications and did so where it wished.”
  • The House committee report and statements by members of Congress described the five groups as qualifying without any further test.
“Enforcement of an unlawful definition of ‘medically frail’ may lead to the disenrollment of otherwise eligible vulnerable individuals relying on Medicaid coverage for continuity of care.” — Judge Stearns, 29 October 2026

What the states lost

The court rejected the states’ arbitrary-and-capricious challenge to two other parts of the rule:

  • the 12-month look-back, meaning states may use only the last 12 months of claims and encounter data to verify frailty; and
  • the limit of one self-attestation per period of enrollment.

It found CMS gave a “non-frivolous rationale” for both, noting “that the States (or even the court) may disagree with the wisdom of the agency’s policies … is irrelevant.” It did not decide the Spending Clause claim. Each side’s motion was allowed in part and denied in part.

Relief

  • Vacatur of the “significantly impairs … ability to comply” language, rather than sending it back to the agency.
  • A permanent injunction against enforcing or implementing that language.
  • A six-month stay of enforcement against the plaintiff states for frailty determinations, to allow for errors while they rebuild verification systems. The court says this does not move the 1 January 2027 start date, which the states did not ask to change and which the court said it could not change.
Citizen impact: For expansion adults in the plaintiff states, a qualifying diagnosis or disability should be enough to be exempt without also proving they cannot meet the 80 hours. Medical records older than 12 months still won’t count, and self-attestation is still limited to once per enrollment period, so paperwork still matters. The work requirement itself is unaffected.

What this piece does not say

We do not say whether the injunction applies outside the plaintiff states. The memorandum does not spell that out, and we have not pulled the separate judgment entry. We do not estimate how many people are affected, because the opinion gives no figure. California’s Attorney General describes the outcome in the same terms as the opinion.

Bottom line

The extra “can’t comply” test for the medically frail exemption is vacated and permanently enjoined. CMS’s tighter evidence rules stand. The 80-hour requirement still starts on 1 January 2027.